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Quantamize End of Day Market Update April 10

Apr 10, 2018

US Market Recap

US equities closed higher, extending midday gains. Calming Sino-American trade concerns, an early market catalyst, were furthered by President Trump’s tweet this afternoon in which he remarked that he was “very thankful for President Xi of China's kind words on tariffs and automobile barriers”. President Trump then praised President Xi’s “enlightenment on intellectual property and technology transfers”. The VIX fell to 20.47, down from 21.18 at midday. Additionally, an S&P 500 advance/decline ratio of 6.01 (433 advances and 72 declines) indicates positive investor sentiment. Returns in energy and technology paced the market.

The S&P 500 advanced 1.67%, though large-cap stocks underperformed the broader market. Energy (+3.32%) was a significant outperformer. The 4 best performing stocks in the S&P 500, TechnipFMC (+7.0%), Devon Energy (+6.78%), Range Resources (+6.10%), and New Field Exploration (+6.05%), all operate in the energy sector. Technology was a broad outperformer with information technology and telecommunications rising 2.48% and 2.31%, respectively. Large-cap healthcare, financials, and industrials all gained more than 1.5%. Consumer stocks closed higher as consumer discretionary rose 1.21%, while consumer staples increased by 0.23%. Utilities (-0.72%) and real estate (-0.71%) were the only 2 sectors in the S&P 500 sectors in the red.

Russell 2000 stocks finished up 1.91%. Energy (+5.04%) was the biggest outperformer due to robust returns from oil well & refining, crude production, and coal. Technology (+2.80) was the next best performer, followed by healthcare (+2.41%). Materials moved 2.11% higher, led by returns in aluminum producers. Consumer stocks advanced broadly with consumer discretionary and consumer staples gaining 1.32% and 1.17%, respectively. Utilities (+0.35%) were the worst performer with electrical & gas utility stocks being laggards.

DEVON ENERGY (DVN) is laying off 9% of its workforce and is seeking to cut $200 million in outlays by 2020. Devon shares rallied 6.77% today.

During Mark Zuckerberg’s testimony today, the FACEBOOK (FB) CEO said that there will always be a free version of Facebook. It still remains a possibility that Facebook may eventually rely on user fees instead of advertising revenue. Facebook shares rallied 4.50%.

Rumors of a potential take over of W.R. GRACE (GRA) by HONEYWELL (HON) have emerged. W.R. Grace declined to comment. W.R. Grace shares soared 6.49% and Honeywell shares gained 1.95%.

The SINCLAIR BROADCAST GROUP (SBGI) takeover of TRIBUNE MEDIA CO (TRCO) is receiving pushback from the FCC. The FCC is taking issue with the owners of the New York and Chicago news stations that Sinclair was planning to spin off from Tribune’s assets. Sinclair shares fell 1.18%, while Tribune shares fell 0.97%.

The US 10-Year was unchanged from this afternoons update, with the 10-Year yield closing at 2.792%, while the US 30-Year Yield closed at 3.018% slightly higher than this afternoon’s level of 3.016%. The USD$ was lower today, closing at 89.63, down 23bps on the day. The US Dollar fell against most majors, but was notably stronger against the Yen, gaining 37bps to 107.16. Most precious metals rallied today with Gold (USD$ 1340.45/ounce), Silver (USD$ 16.58/ounce), and Palladium (USD$951.73/ounce) gaining 31bps, 50bps, and 219bps respectively. Platinum (USD$ 930.45/ounce) was the lone precious metal to fall, declining 22bps. Lastly, WTI Crude oil rallied 371bps to USD$ 65.77/barrel.

Cryptocurrencies

Cryptocurrencies rallied today, with 22 of the top 25 cryptocurrencies by market cap rallying today. Ontology (ONT) and Verge (XVG) were the biggest gainers, gaining 24.98% and 20.32%, respectively. Bitcoin is trading at $6,836.20 up 1.86%, Ethereum is trading at $409.22, up 3.56%, Ripple at $0.4904 up 1.04%, Bitcoin Cash at $649.74 up 2.73%, and Litecoin at $113.94 down 0.19%. Crypto news is light today. The managing director of Crypto Asset Management, Timothy Enneking, believes that the bear market in cryptos is nearly over. Enneking felt that regulation, asset consolidation, and liquidation of crypto asset led to the recent decline. Crypto Asset Management has about $20 million in assets under management.

The Euro Stoxx 600 closed 0.82% higher. Basic resources (+2.64%) was the best performer, led higher by returns in chemicals (+0.69%). Autos & parts gained 1.85% and was one of the biggest outperformers after being maligned in recent trading. Healthcare and technology both moved more than 1% higher. Global utilities were significant underperformers, offering disappointing returns in the Euro Stoxx 600 (-0.75%), and were the worst performers in the S&P 500 and Russell 2000.

Major regional markets outperformed the broader Euro Stoxx 600. The FTSE 100 rose by 0.94%, the Dax gained 1.14%, and the CAC40 increased by 0.86%.